DOHA: Cement production in the country is forecast to be inadequate to meet Qatar’s future demand, and is likely to result in supply shortage of almost 3mn tones per year by 2015.
In a bid to meet the projected demand and avoid any possible rise in the prices, Qatar has signed contracts with firms in the UAE and Oman.
Qatar is also facing serious shortage of skilled labours due to persistent lower salaries. Due to poor wages in the construction sector, the companies in Qatar are unable to source workers from other regions, such as Asia, a latest market analysis of GCC’s construction sector noted.
Qatar’s construction sector continues to face hurdles in the form of rising construction costs and higher competition.
Qatar, along with Saudi Arabia, have faced considerable rise in construction material and employee costs. On the other hand UAE market faces industry consolidation and high competition.
“Qatar’s construction market has been growing on the infrastructure wave as a result of the country’s 2030 vision and preparations to host the 2022 FIFA World Cup. Government spending on infrastructure is estimated to exceed $200bn over the next 10 years, with $140bn to be spent over the next five years. Transportation infrastructure and commercial infrastructure are among the government’s key focus areas,” the Global Investment House’s Q42012 GCC Construction sector analysis said.
The construction sector continues to face hurdles in the form of rising construction costs and higher competition. Saudi and Qatar markets have faced considerable rise in construction material and employee costs. On the other hand UAE market faces industry consolidation and high competition.
Thus, gross margin of the sector dipped to 9.2 percent in 4Q12 from 13.4 percent in 3Q12. Overall, GCC companies witnessed a solid recovery in the construction activity throughout 2012, with rising project awards and improving project execution.
Total value of projects awarded witnessed a large push in 4Q12, coming in at $2.1bn, 52.1 percent up from $1.4bn in 3Q12 and double of $1.bn recorded in 1Q12.
Consequently, the sector’s order backlog improved too, growing 8.3 percent QoQ to $11bn in 4Q12 from $10.1bn in 3Q12. The UAE contractors continue to be the largest in terms of order backlong. GCC contractors witnessed profit of $52m; down 43.7 percent YoY and up 89.7 percent QoQ. Majority of the companies witnessed better performance when compared with the previous quarter.
Non-core income contributed handsomely to the overall profitability of the sector as operating profit was down 84 percent QoQ whereas the net profitability was up 89.7 percent.
The Peninsula
